BHI rig count has seen only one drop in 18 weeks from February to June

Drilling activity fell in the U.S. this week, snapping a ten-week long streak of increases, according to Baker Hughes Weekly Rig Count.

A net three rigs came offline today, leaving 1,059 rigs operational in the U.S.

The recent rise in rig counts was quietly becoming one of the most steady on record. A total of 116 rigs came online from early February to early June, with only one drop in rig counts in eighteen weeks. Activity rarely increases in such a steady manner, most periods of rising rig counts in the past 30 years have been interspersed with short-term drops.

In fact, the recent string of only one drop in activity over 18 weeks has been equaled only twice in the past 30 years and exceeded only once, during the resurgence of shale activity in late 2016 and early 2017.

Four land-based rigs shut down this week, while one rig operating in inland waters began operations. Offshore rigs were flat, meaning there are now 1,035 land, four inland waters and 20 offshore rigs drilling in the country.

Gas drilling declined in popularity, with four rigs coming offline this week. One oil-targeting rig began drilling, so 863 oil-targeting rigs, 194 gas and two miscellaneous rigs are currently operational.

No increases were seen in individual trajectories, as directional rigs were flat at 67, horizontal rigs fell by two to 932 and one vertical rig shut down, leaving 60 operational.

Texas, Permian down four

Many states saw rig counts change this week, as activity shifted throughout the country. The largest increases were seen in New Mexico and North Dakota, which each added three rigs. One rig also came online in Louisiana and Mississippi. One rig shut down in Colorado, Montana, Ohio, Pennsylvania and West Virginia, two came offline in Alaska and four stopped drilling in Texas.

The world’s most popular shale basin declined slightly in popularity this week, as four rigs shut down in the Permian. Upcoming months will be very important for the Permian, as operators decide if activity levels need to be adjusted in light of the harsh current differentials. Historically, rig counts have taken roughly four months to respond to changes in prices, so if producers do decide to curtail drilling it would likely become apparent around August.

The largest increases in individual basins were seen in the Eagle Ford and Williston, where two rigs came online. One rig also began drilling in the Granite Wash, while one shut down in the Arkoma Woodford, Cana Woodford and Utica and two came offline in the Marcellus.

Legal Notice